Leveraging the Latest Housing Market Trends
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Transcript of Leveraging the Latest Housing Market Trends
LEVERAGING THE LATEST HOUSING MARKET TRENDS
© 2013 Renwood RealtyTrac LLC
WELCOME
WHAT WE’LL COVER TODAY
• A brief bit on RealtyTrac• How long will the short sale surge last?• The problem and opportunity of zombie
foreclosures• The incredible disappearing REOs• Flipping and institutional investors• Home prices buoying underwater inventory• Boomerang buyers boomeranging more quickly
© 2013 Renwood RealtyTrac LLC
REALTYTRAC DATA PRIMER
Economic
Neighborhood & Local
MLS
Sales & Loan
Valuation& Prop Details
Foreclosure
© 2013 Renwood RealtyTrac LLC
REALTYTRAC DATA PRIMER
County-Level Public Documents• Pre-foreclosure, foreclosure auction and REO• Sales & Loan• Valuation and property characteristics
MLS• Listing status, price and other info• Property description and more characteristics
Publicly available datasets• Neighborhood features, amenities, red flags• Macro housing and economic metrics
© 2013 Renwood RealtyTrac LLC
HOW LONG WITH THE SHORT SALE SURGE LAST?
© 2013 Renwood RealtyTrac LLC
HOW LONG WILL SHORT SALE SURGE LAST?
© 2013 Renwood RealtyTrac LLC
June foreclosure starts at lowest level
since December 2005
HOW LONG WILL SHORT SALE SURGE LAST?
© 2013 Renwood RealtyTrac LLC
Seriously underwater means mortgage amount is at least 25 percent
higher than estimated market
value
HOW LONG WILL THE SHORT SALE SURGE LAST?
© 2013 Renwood RealtyTrac LLC
1.5 million fewer underwater in last year
HOW LONG WILL SHORT SALE SURGE LAST?
© 2013 Renwood RealtyTrac LLC
Distressed median prices still flat lining
HOW LONG WILL SHORT SALE SURGE LAST?
© 2013 Renwood RealtyTrac LLC
Average Annual Pct Change YTD in 2013 is 7 percent – will take 3.5
more years at minimum to get all seriously underwater borrowers
back with positive equity
HOW LONG WILL SHORT SALE SURGE LAST?
© 2013 Renwood RealtyTrac LLC
Up 53 percent compared to year
ago in Q2 2013
At pace of 700,000 short sales a year it would still take more than 15 years
to sell off all of the 11.3 million seriously underwater homes
HOW LONG WILL SHORT SALE SURGE LAST?
© 2013 Renwood RealtyTrac LLC
HOW LONG WILL SHORT SALE SURGE LAST?
• Other considerations that could slow short sales– Rising home prices give lenders hope to hold out for REO– Rising home prices give homeowners hope to hold on• But these homeowners could be future equity sales
– Top 5 lenders less motivated to do short sales as they fulfill requirements under the national mortgage settlement
– Expiration of Mortgage Forgiveness Debt Relief Act
© 2013 Renwood RealtyTrac LLC
LEVERAGING DISTRESSED TRENDS TIP NO. 1
© 2013 Renwood RealtyTrac LLC
Foreclosure Inventory and
Prices
Historical Foreclosure Discounts
1. Know your market
LEVERAGING DISTRESSED TRENDS TIP NO. 1
© 2013 Renwood RealtyTrac LLC
Local, state and national
foreclosure rates
Recent default, auction and REO trends
WHERE FORECLOSURE STARTS & AUCTIONS ARE REBOUNDING
© 2013 Renwood RealtyTrac LLC
WHERE FORECLOSURE STARTS & AUCTIONS ARE REBOUNDING
YoY Pct Increases:• Maryland: 365%• Connecticut: 47%• New York: 36%• New Jersey: 27%• Oregon: 59,200%
WHERE FORECLOSURE STARTS & AUCTIONS ARE REBOUNDING
© 2013 Renwood RealtyTrac LLC
YoY Pct Increases:• Florida: 100%• Arkansas: 71%• Illinois: 65%
• Wisconsin: 45%• Washington: 21%
WHERE FORECLOSURE STARTS & AUCTIONS ARE REBOUNDING
• Why are foreclosure starts and auctions rebounding?– Pent-up foreclosure activity from robo-signing, national
mortgage settlement and state legislation/court rulings– Rising prices may be helping to motivate foreclosure
• What are implications for real estate agents?– Clock is now ticking on delinquent homeowners– Auctions another source of finding distressed
buyers/sellers in the form of investors
© 2013 Renwood RealtyTrac LLC
LEVERAGING DISTRESSED MARKET TRENDS TIP NO. 2
©RealtyTrac Inc. 2013, Not for Distribution
Filter by property value and
characteristics
Filter by property type
Filter by equity/LTV
Filter by lender name and auction date
Filter by listing status and bankruptcy status
Target potential short sale listings with advanced search
filters
LEVERAGING DISTRESSED TRENDS TIP NO. 2
© 2013 Renwood RealtyTrac LLC
Create mailing lists of distressed homeowners in
default or scheduled for foreclosure auction
THE PROBLEM & OPPORTUNITY OF ZOMBIE FORECLOSURES
© 2013 Renwood RealtyTrac LLC
THE PROBLEM AND OPPORTUNITY OF ZOMBIE FORECLOSURES
© 2013 Renwood RealtyTrac LLC
THE PROBLEM & OPPORTUNITY OF ZOMBIE FORECLOSURES
© 2013 Renwood RealtyTrac LLC
THE PROBLEM & OPPORTUNITY OF ZOMBIE FORECLOSURES
© 2013 Renwood RealtyTrac LLC
THE PROBLEM & OPPORTUNITY OF ZOMBIE FORECLOSURES
• The problem– More than 167,000 vacant homes nationwide, 20
percent of all homes in the foreclosure process– Homeowners often don’t realize they still own the
property and are responsible for taxes etc.
• The opportunity– Homeowners who have exhibited a desire to let go of
the property– Lenders who don’t want to foreclose
© 2013 Renwood RealtyTrac LLC
LEVERAGING DISTRESSED TRENDS TIP NO. 3
© 2013 Renwood RealtyTrac LLC
Identify homeowners who have vacated their homes and get
new mailing addresses
THE INCREDIBLE DISAPPEARING REOS
© 2013 Renwood RealtyTrac LLC
THE INCREDIBLE DISAPPEARING REOS
U.S. REOs dropped to a 72-month low in
April 2013
THE INCREDIBLE DISAPPEARING REOS
© 2013 Renwood RealtyTrac LLC
THE SHIFT IS ON
© 2013 Renwood RealtyTrac LLC
THE INCREDIBLE DISAPPEARING REOS
© 2013 Renwood RealtyTrac LLC
Nationwide Deeds in Lieu of Foreclosure
increased 39 percent in 2012 from 2011
THE INCREDIBLE DISAPPEARING REOS
• REOs are down but not out– Recent rise in foreclosure starts and scheduled
foreclosure auctions in some markets will translate into bank repossessions in the next 6 to 12 months
– Rising home prices mean banks may be willing to tackle the increasingly costly and complex REO process to get a higher price out of a property down the road
© 2013 Renwood RealtyTrac LLC
LEVERAGING DISTRESSED TRENDS TIP NO. 4
© 2013 Renwood RealtyTrac LLC
Find unlisted bank-owned homes
FLIPPING & INSTITUTIONAL INVESTORS
© 2013 Renwood RealtyTrac LLC
FLIPPING & INSTITUTIONAL INVESTORS
U.S. property flips increased 17 percent from a year ago in the
second quarter
FLIPPING & INSTITUTIONAL INVESTORS
© 2013 Renwood RealtyTrac LLC
FLIPPING & INSTITUTIONAL INVESTORS
© 2013 Renwood RealtyTrac LLC
FLIPPING & INSTITUTIONAL INVESTORS
© 2013 Renwood RealtyTrac LLC
U.S. institutional investor purchases
increased 16 percent from year ago in Q2
FLIPPING & INSTITUTIONAL INVESTORS
© 2013 Renwood RealtyTrac LLC
LEVERAGING DISTRESSED TRENDS TIP NO. 5
© 2013 Renwood RealtyTrac LLC
Find repeat investor clients by attending foreclosure auctions and order lists of the most
active institutional investors in your market.
LEVERAGING DISTRESSED TRENDS TIP NO. 5
© 2013 Renwood RealtyTrac LLC
Find repeat investor clients and other buyers by showing up as the local expert when they are
searching for auctions or other properties.
HOME PRICES BUOYING UNDERWATER INVENTORY
© 2013 Renwood RealtyTrac LLC
HOME PRICES BUOYING UNDERWATER INVENTORY
4.5 million homes nationwide would transition from short sales to
equity sales with 10 percent increase in home prices; 8.3 million
with a 20 percent rise
© 2013 Renwood RealtyTrac LLC
Annualized residential sales above 5 million for nine consecutive months
ending in June
LEVERAGING DISTRESSED TRENDS BONUS TIP
© 2013 Renwood RealtyTrac LLC
Establishing a relationship with a distressed homeowner may not always lead to a distressed sale today; in today’s market it could very likely lead to a
non-distressed sale tomorrow.
BOOMERANG BUYERS
© 2013 Renwood RealtyTrac LLC
BOOMERANG BUYERS BOOMERANGING MORE QUICKLY
• The News– HUD just recently changed its guidelines to allow some
homeowners who have gone through foreclosure, short sale or bankruptcy to qualify for FHA financing.
– Now these homeowners can qualify for FHA financing as soon as 12 months after the “last event”
– This is down from a minimum of 36 months
• The Opportunity– Reach out to your list of homeowners who have sold via short
sale in the last year-plus to see if they are interested in buying.– Get lists of homeowners who have lost their home to
foreclosure in your area in the last year-plus
BOOMERANG BUYERS BOOMERANGING MORE QUICKLY
© 2013 Renwood RealtyTrac LLC
4.6 million completed foreclosures and short sales from 2007 to 2010.
Additional 2.4 million completed foreclosures and short sales in 2011
and 2012